Gansu Survey of Children and Families Papers

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Book Chapter

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Postprint version. Published in Creating Wealth and Poverty in Socialist China, edited by Deborah Davis and Feng Wang, © 2009 by the Board of Trustees of the Leland Stanford Jr. University, all rights reserved. By permission of the publisher. No further distribution, reproduction or any use of this material is allowed with the prior written permission of Stanford University Press,


In China, education plays an increasingly important role in the creation of wealth and poverty. In the reform era, education has become closely tied to earnings (Yang 2005; Zhang et al. 2005). Returns to education in urban China increased significantly from 1978 to 1993, though returns were still relatively low in 1993, at less than four percent per year of schooling (Zhao and Zhou 2006). More recent trend data based on National Bureau of Statistics surveys show rapid increases in economic returns to a year of education in urban China: returns nearly tripled during the period 1992 to 2003, rising from 4.0 to 11.4 percent (Zhang and Zhao 2006). In rural areas, by the year 2000, an additional year of education increased wages by 6.4 percent among those engaged in wage employment, and education is becoming the dominant factor that determines whether rural laborers are successful in finding more lucrative off-farm jobs (de Brauw et al. 2002; de Brauw and Rozelle 2007; Zhao 1997). Given the rising role of education as a determinant of economic status, those who lack access to schooling are at high risk for a life of poverty.

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Date Posted: 03 December 2008